S&P 500 rides tech higher as Treasury yields drop on soft economic data

August 29, 2023 4:04 PM EDT -- The S&P 500 rose Tuesday, as data pointing to a softer economy pushed Treasury yields lower as investors boosted bets that the Federal Reserve will likely skip rate hikes in September.

The S&P 500 rose 1% higher, the Dow Jones Industrial Average fell 0.8%, 277 points, Nasdaq was up 1.7%.

Treasury yields wobble after consumer confidence, jobs come up short

Treasury yields continued to ease as the latest economic data showing an unexpected fall in consumer confidence and a surprise drop in job openings pushed up bets that the Fed is likely to stand pat on rates in September.

The Conference Board’s consumer confidence gauge fell to 106.1 in August from 114 in July, confounding economists’ forecast for a reading of 116.

The U.S. Labor Department's latest Job Openings and Labor Turnover Survey (JOLTs) report, a measure of labor demand, showed job openings in July fell to about 8.8 million, missing expectations of 9.46M.

Following the weaker-than-expected data, suggesting that the Fed’s rate hikes are beginning to work, bets on a Fed pause in September jumped to nearly 90% from about 80% last week, according to’s Fed Rate Monitor Tool.

Tech takes flight as yields wobble to fuel growth stocks

Big tech was in rally mode as falling Treasury yields, which make higher-valued growth stocks including tech and consumer stocks more attractive, pushed the broader market higher.

Meta Platforms Inc (NASDAQ: META) and Alphabet (NASDAQ: GOOGL) led the move higher, with the latter getting its three-day cloud event underway and unveiling plans to integrate artificial intelligence deeper into its cloud products.

Broader sentiment on tech continues to be healthy as a Bank of America survey showed Tuesday that tech was among the top sectors that drove in a $3.7 billion of inflows to stocks last week.

Farfetch cuts losses despite downgrade; Nio falls on wider loss

Farfetch (NYSE: FTCH) cut its losses even as Morgan Stanley downgraded the luxury and beauty products platform to equal weight from overweight, citing a high level of volatility and limited near-term catalysts.

The downgrade comes just a week after the luxury and beauty products platform reported weaker-than-expected quarterly revenue and cut its guidance.

Nio Inc (NYSE: NIO), meanwhile reported a wider-than-expected loss, sending its shares 2% lower. The Chinese EV maker did, however, say it expects to deliver between 55,000 and 57,000 vehicles in the current quarter, above estimates of 50,000.

Crypto-related stocks jump on Bitcoin spot ETF optimism

Crypto-related stocks including Marathon Digital Holdings Inc (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT), and Coinbase Global Inc (NASDAQ: COIN) were pushed higher by a surge in bitcoin after a U.S. court ruled that the Securities and Exchange Commission was wrong to dismiss digital asset manager Grayscale's application for a spot bitcoin exchange.

The decision lifted hopes for a bitcoin spot ETF, which is expected to attract investors as it will provide a cost-effective and liquid method to get exposure to bitcoin.

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